Charity governance in need of urgent overhaul

With nearly 170,000 registered charities in the UK and a further 20,000 organisations with charitable status, trustees play a crucial role in ensuring the charities they govern operate effectively and ethically, and in the best interests of the beneficiaries and the communities that they serve. 

The commitment and dedication of volunteer trustees is essential to the impactful and sustainable functioning of the charitable sector. However, one of the biggest challenges lies in the myriad of responsibilities that trustees have to navigate, all as volunteers. Continued changes to regulation and compliance that means trustees must do more to remain up-to-date and ensure they are doing their job effectively.

Every time the sector faces a high-profile issue with charitable governance, trustees get more regulation to deal with. And while, to some extent, this is understandable, there is a worry about just how much more pressure trustees can reasonably be put under.  

Increasing expectations limit trusteeship

Many funders are also now increasing their expectations of trustees, either to be directly involved in overseeing the delivery of grants or in attending additional meetings. 

These expectations potentially limit trusteeship to a certain profile of individual. For example, those with comfortable wealth, a certain amount of free time and the privilege of a certain type of education. 

This is completely at odds with what charities often need, which is diverse boards with an understanding of the communities and beneficiaries they serve and with lived experience of the charity’s core issue or cause. 

The drive for diversity

This drive for diversity has come from the regulator and funders themselves, with organisations such as the Charity Commission, Arts Council England and the National Lottery Heritage Fund, all seeking to ensure that boards are more welcoming of trustees from diverse backgrounds. 

Data from Arts Council England in 2020-21 showed increases in trustee representation in ethnicity, disability, gender and LGBT representation across their regularly funded organisations. 

For example, representation of Black, Asian and ethnically diverse people increased to 18% and disabled representation is at 9%. These figures are far higher than the charity sector as a whole although, of course, there is much more to do.

Significant barriers to engagement

There remain significant barriers to effective engagement from trustees. For example, the high levels of financial and legal knowledge required, long written documents with extensive guidance from funders that may present difficulties – especially if the information is not presented in accessible formats, and too many tokenistic recruitment practices where trustees are not properly onboarded or trained. 

If we genuinely want diverse and inclusive boards, we need to understand how the system can better facilitate that goal. We urgently need to bring together funders with the Charity Commission, as the regulator, to explore these dilemmas and find practical responses so charity boards can diversify and all trustees can be effective in their governance roles. 

We also need to raise the profile of trusteeship and build the opportunities to serve on charity boards into early career pathways for young people. Trusteeship should become part of a portfolio of opportunity for younger people throughout their lives.

Changing responsibilities

More crucially, trustees need regular training to keep up to date with changing responsibilities. A focus on board culture, so that trustees understand their role in setting and overseeing strategy, and how to interact with staff and volunteers. 

Every trustee should understand how their value to the organisation and be self-critical in analysing behaviours which are less helpful in moving the charity forward. This requires ‘trustee only’ discussion and regular review, as the needs of the charity will constantly change.

This month, Arts Fundraising & Philanthropy launches our next Enquiry into these issues, bringing together a group committed sector experts to explore and answer some of the burning questions facing those in governance roles today. 

We hope our findings from this Enquiry and our follow-up report will provide some useful insights for charities, regulators and funders, so that trustees can better engage with the complexities of charity governance, as well as understand what support might help them best fulfil their duties. 

Michelle Wright is CEO of Cause4 and Programme Director of the Arts Fundraising & Philanthropy Programme. 
 artsfundraising.org.uk
@artsfundraising | @MWCause4

This article is part of a series on the theme Fundraising for the Future, contributed by Arts Fundraising & Philanthropy.